Why bad pricing will kill your business
In my opinion a letter tribute CANNOT cost less than £55 per letter. In fact, I don’t really think they should be sold for less than £60/65 if they are made properly and certainly not if there’s a cluster, anything other than AYR basing and a foliage trim.
Because by the time you take into account the cost of the frame, the flowers, the foliage, the ribbon, the cluster and your time plus a contribution to the rent, rates, insurance and all the other costs of running a business you simply can’t charge anything less than £55 and even then I would worry about the profitability … and no I don’t care how cheaply you buy the flowers for.
Sorry, what do you mean you don’t take into account a contribution to your overheads?
Excuse me; did I really hear you say you don’t charge for your time?
What do you mean you are charging £25 a letter because there’s a woman up the road who’s does them for that so you have to charge the same as otherwise you won’t get the business?
In the words of John McEnroe; You Can Not Be Serious!
But it is serious. These are all genuine comments from florists and it really worries me. Not just because it means a lot of florists haven’t got a clue about pricing or profitability but, by charging too low a price, they make those who do price properly look expensive when actually they are simply charging the right price.
As for the florists who either tell me their customers won’t pay more than £25 or try and price match £25 a letter to get the business I despair even more. Because that implies that either their shop is in the wrong location/not destined to survive or they are too scared to stand by their guns and charge what needs to be charged. Neither of which is good for anyone’s health, sanity or bank balance never mind the insult in pays to other professional florists.
Throughout the world of retail there are discounters (think Aldi/Lidl/Primark/TK Maxx etc) just as there are differing grades of coffee shops, bakeries (Gregs versus Gails) shoe shops (Russell & Bromley versus Shoezone) et al but does Waitrose price match to Lidl, nope. Does Phase Eight slash the price of their dresses to match Primark. Have Gails introduced a low priced sausage roll because they are afraid of Gregs. Not on your nelly!
They may have special lines and offers but they have determined their place in the market and consciously gone for the customer who can pay the price they need. And you can be sure as heck that price will cover all the things on my list and then some.
Now I first wrote this blog back in 2016 ... at that time (9 years ago) I was saying £35 a letter but sadly people are still getting it horribly wrong.
So in an even tougher trading climate please, please do me, and yourself, a favour.
Don't bemoan what other people charge - leave them to it to and let them learn the hard way.
Instead, make sure YOUR prices cover ALL your overheads, Cost of Goods, something for yourself and a rainy day and NEVER EVER try and price match or worse still undercut a perceived competitor to get business. 1: It’s the biggest mistake a business can make 2: If the customer is that cheap it’s not the sort of customer you want or need if you are going to keep your dream alive.
